Evercore ISI lowered its price target on BJ's Wholesale Club Holdings (NYSE: BJ) to $85 from $100 while maintaining an In Line rating, citing near-term margin pressures and slowing comparable-store sales. Shares slipped more than 1% in premarket trading Monday.

The firm added BJ's to its “TAP underperform” list ahead of the company's fiscal third-quarter results, scheduled for November 21. Evercore cut its FY2025 EPS estimate to $4.25 and FY2026 EPS to $4.65, expecting modest price and wage investments to support market share and inventory turnover.

The analysts forecast Q3 comparable sales growth of below 2%, versus Street estimates of 2.5%, and EPS of $1.07, slightly below consensus of $1.10. They modeled a 60-basis-point decline in gross margin as BJ's invests in pricing to strengthen member loyalty, while fuel mix and penny profit pressures weigh on profitability.

Evercore also forecast EBIT margin at 4%, down 60 bps year over year, with EBIT of $210 million—representing a 9% decline compared to the prior year.

Looking ahead, the firm said management would likely guide for a 1-2% comp in the fourth quarter, implying EPS of $0.88-$0.92 versus Street estimates of $0.94.

Evercore highlighted recent executive changes, including Chief Merchant Rachel Vegas's departure to Walgreens, which it said could indicate challenges in BJ's merchandising strategy. While BJ's had improved its general merchandise offering, comps in the 2-3% range suggested market share softness relative to expectations for steady 3-4% growth and operating margin expansion.